PSA and Opel in talks over likely joint vehicle development

PSA/Peugeot-Citroen and General Motors' Opel unit are holding discussions over a possible joint vehicle development, although there are still no plans to produce cars together, Opel’s interim chief executive Thomas Sedran told German business magazine Wirtschaftswoche. Sedran remarked that the quality of the discussions is really very good.

He noted that the operational and technical advantages of the project are “so great” that the parties will surely be able to conclude soon the negotiations on joint vehicle development. Sedran told Wirtschaftswoche that the plan involves coming up with four new model series by 2016 or 2017 -- a successor to the Opel Zafira minivan, two compact cars and a successor to the Opel Insignia and Citroen C5.

Opel targets to improve its business in Russia and Turkey by taking advantage of its German brand image, Sedran told Wirtschaftswoche. Opel is currently working on a plan to bolster its sales in China from 5,000 units a year.

Sedran told the German magazine that a carmaker can only be successful in China if it produces there, noting that plants in Europe “aren't much help."

GM and PSA signed an initial alliance agreement in February 2012 with the goal of saving at least $2 billion annually within five years, evenly split between them. As part of the original deal, GM paid EUR320 million ($419 million) for a 7-percent stake in PSA.

People privy to the situation told Reuters in November that GM and PSA had terminated discussion on a possible deeper partnership amid misgivings about PSA's deteriorating finances and government-backed bailout.